As I sit in my home office…AGAIN…I am reflecting on so many things. COVID, family and most of all, the transportation industry. What a state we have gotten ourselves in. I have fielded dozens of calls from prospective owner operators over the past year wanting to be insured. If this was 2017, I would be very busy!! As it is 2020, I have to repeatedly disappoint them. Insurers have tightened their already strict eligibility rules, and new ventures are just out of the question, or very restricted. For example: if you are a new owner operator and have a new CVOR and operating authorities in the US, and have not had insurance attached to them in the past three years, some insurers decline to offer a quote. Some insurers will accept new authorities, if you have been an owner operator, under a fleet for the past three years. However, you cannot have any growth for two years, according to one insurer, or minimal growth according to other insurers. This is to control rapid, ungoverned growth and is thought to be safer in the long run. Too many times insurers have written a single unit insurance policy, only to have five, ten, fifteen trucks added within the first half of the policy term. This has proven to lead to frequency in losses and catastrophic losses. With no or very little safety oversight, hiring practices are not followed and lesser qualified drivers are added, etc.
Unfortunately, this has lead to new operators seeing Facility insurance, as a last resort, which has zero rules or restrictions in place. As Automobile Liability insurance is mandatory in Ontario, there has to be a place, or a Facility, for everyone to obtain insurance. Hence the name; Facility Insurance Association. So basically, the same non-eligible trucking companies are still running up and down the roads, just with more expensive insurance. It is very frustrating and a true bane of my existence as a trucking insurance broker. It’s not all doom and gloom. There is a task force at work addressing the situation and we hope to hear from changes and betterments from them soon.
We also have insurers placing high premiums on fleets that historically would not have such large increases. These fleets follow the rules, utilize the latest technologies and report all of t heir units and drivers and are being hit with large increases to offset the bad actors. One of my fleets suggested that the insurance company uses their data to confirm where they go, what they haul and exactly how many units are running? It would take away self reporting, leave no room for deceit and help the insurance company rate them specifically for what the data tells t hem? I think the idea has merit. Will it fly with the insurers? Only time will tell.